A salesperson, with a view to promote sales of an item, applies the principle of simple interest. He declares that 300 pieces of the item can be obtained immediately against cash payment, but a customer will get only 200 pieces of the item if he defers the payment for a year. What is the rate percentage of interest on the whole?

Option 2 : 50

Given:

He declares that 300 pieces of the item can be obtained immediately against cash payment, but a customer will get only 200 pieces of the item if he defers the payment for a year.

Concept used:

Simple Interest, SI = (P × R × T) ÷ 100

where

P = Principal amount

R = Rate of interest per year

T = Time in years

Calculation:

So, basically, the buyer is paying (300 - 200) = 100 pieces items as interest if he defers the payment for a year, on the principal amount of 200 pieces

Let the rate of interest be R%.

According to the question,

(200 × R × 1) ÷ 100 = 100

⇒ R = 50

∴ The rate percentage of interest on the whole is 50%